Home Ownership

No. The Assessment payments you paid your homeowner's association for maintaining common areas of the residential property, such as recreation or safety, are not deductible. Amounts paid are added to the tax basis of the home. The tax basis will be used in the year of the sale to determine the gain or loss on sale.

For mortgage interest payments of $600 or more, banks and other lending institutions will mail you Form 1098 listing your mortgage interest payments and also any deductible points. This amount is deductible on IRS Schedule A.

No. Legal fees incurred in reducing an assessment on property are not deductible.

Generally points are deductible in full in the year paid if 6 requirements are met. Form 1098 Mortgage interest statement is used to report the amount of the paid points. Points paid to refinance an existing mortgage must be amortized over the life of the loan unless the loan proceeds are used to substantially improve the main residence. The portion used to improve the residence can be deducted in full in the year paid. Speak to your local CPA about the 6 requirements.

Personal property taxes based on the value of your house and imposed on a yearly basis are deductible as an itemized deduction. Personal property taxes based on some other criteria, such as weight or size of a car, are not deductible.

Generally, you can only deduct real estate taxes on real estate which you own and therefore have an obligation to pay. Therefore, if you pay your parent’s real estate taxes on their home, wit title in their name, you will not be allowed to deduct those real estate taxes on your income tax return. If you would like to deduct these taxes, you will have to be put on the title.